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- Alaska Statutes.
- Title 13. Decedents' Estates, Guardianships, Transfers, and Trusts.
- Chapter 38. Principal and Income of Trusts
- Section 740. Derivatives and Options.
previous: Section 730
. Property Not Productive of Income.
next: Section 750
. Asset-Backed Securities.
AS 13.38.740. Derivatives and Options.
- (a) To the extent that a trustee does not account under AS 13.38.620
for transactions in derivatives, the trustee shall allocate receipts from and disbursements made in connection with
those transactions to principal.
- (b) If a trustee grants an option to buy property from the trust, whether or not the trust owns the property when the
option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to
buy property for the trust or an option to sell an asset owned by the trust, and the trustee or other owner of the
asset is required to deliver the asset if the option is exercised, an amount received for granting the option shall be
allocated to principal. An amount paid to acquire the option shall be paid from principal. A gain or loss realized upon
the exercise of an option, including an option granted to a settlor or testator of the trust for services rendered,
shall be allocated to principal.
- (c) In this section, "derivative" means a contract or financial instrument or a combination of contracts and financial
instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangible
or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or another market indicator
for an asset or a group of assets.
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